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Fixed overhead budget variance

Tropiano Electronics Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company had budgeted its fixed manufacturing overhead cost at 62,100 for the month and its level of activity at 3,200 MHs. The actual total fixed manufacturing overhead was 61,600 for the month and the actual level of activity was 3,000 MHs. What was the fixed overhead budget variance for the month to the nearest dollar?

3,381 favorable
500 unfavorable
500 favorable
3,381 unfavorable

Solution Summary

Fixed overhead budget variance is inspected.